Good morning, and thank you for joining us today for Concentra Group Holdings Parent, Inc. Earnings Conference Call to discuss the fourth quarter and full year 2024 results as well as some important company updates. Speaking today are the company's Chief Executive Officer, Keith Newton; and the company's President and Chief Financial Officer, Matt DiCanio. Management will give you an overview and then open the call for questions. Before we get started, we would like to remind you that this conference call may contain forward-looking statements regarding future events or the future financial performance of the company including, without limitation, statements regarding operating results, growth opportunities and other statements that refer to Concentra's plans, expectations, strategies, intentions and beliefs. These forward-looking statements are based on the information available to management of Concentra today, and the company assumes no obligation to update these statements as circumstances change. At this time, I would like to turn the conference call over to Mr. Keith Newton.

Thanks, operator. Good morning, everyone. Welcome to Concentra's Fourth Quarter 2024 Earnings Call. If you recall from our conference call in January, we touched on 3 key developments: the preliminary release of our Q4 and full year 2024 financial results, the signing of the Nova Medical Centers acquisition and our financial outlook for 2025. Today, we'll provide updates and more color on each of those topics and set the stage for the year ahead. Before we do that, I'd like to express my sincere gratitude to all of Concentra's colleagues, patients, employer customers, ecosystem partners and investors. 2024 was a transformative year with our successful IPO, a spin-off from Select Medical, solid growth and financial performance and continued execution on our strategic initiatives. As the largest provider of occupational health services in the United States by a number of locations, we are relentless in our mission to improve the health of America's workforce one patient at a time. That is the key driving force behind our success and continued pursuit of excellence. Switching to our fourth quarter 2024 performance. Concentra ended the quarter with 552 occupational health centers and 157 on-site health clinics at employer work sites for a total of 709 locations which is 15 more than Q4 2023. In the quarter, revenue was $465 million compared to $440.7 million in the prior year representing a 5.5% growth year-over-year. Adjusted EBITDA was $77.5 million in the quarter versus $68.3 million in the same quarter prior year or a 13.6% increase. Adjusted EBITDA margin increased from 15.5% in Q4 2023 to 16.7% in Q4 2024, a result of revenue growth and improved cost of services. All of this is consistent with our pre-release announcement back in January. Net income was $22.8 million, and earnings per common share were $0.17 for the fourth quarter 2024. Net income was slightly better than the range we provided in our preliminary flash in January due to the timing of the finalization of our tax expense entries. Net income was lower than the same quarter prior year, primarily due to the IPO recapitalization. From a patient visit standpoint, year-over-year trends in Q4 2024 were very similar to recent quarters. Total visits per day were 46,800, a 2.1% decline compared to the same quarter prior year. This was driven by a 4.8% decline in our Employer Services business, which was expected and consistent with the variance we had been seeing in earlier quarters. The decline in Employer Services visits was partially offset by a 1.1% increase in our workers' compensation volume. As we've discussed before, the foundation for our employer services and workers' compensation visit volumes in the United States is driven by the U.S. labor market and its underlying trends. Total employment continues to gradually grow, which supports our workers' compensation visits. Employer Services visits are more correlated to job creation and churn within the workforce as hiring events are the key driver of these type visits. Hiring rates and quit rates in the United States are starting to show signs of stabilization and bottoming out. While we continue to manage these Employer Services trends to still drive revenue, profit growth and stable margins, we are optimistic and expect that a more stable, growing economy and labor market will help boost our Employer Services volumes from current levels. So far, we are seeing some better trends in these type of visits early in 2025. From a rate standpoint, we had a strong quarter with a 5.8% increase in revenue per visit in Q4 2024 compared to the same quarter prior year. The growth was driven by increases in both workers' compensation and Employer Services revenue per visit as well as a slight shift in mix between these categories. Beyond the financial metrics, we continue to execute on the strategic initiatives and growth objectives we established for ourselves. For example, the spin-off from Select Medical was completed. We made further progress on our separation. We continue to advance our various clinical, operational and technology initiatives and our development pipeline, all while achieving strong satisfaction scores from our patients and customers and improving our colleague retention. This concludes my overall company remarks. I'll now turn the call over to Matt to provide more color on our operating segments, key operating metrics, cost and expenses, cash flow and balance sheet. We'll then wrap the call with further insight into the Nova transaction and the previously provided guidance for 2025.

Thanks, Keith, and good morning, everyone. I'll begin with some additional commentary on our operating segments and our major expense categories as well as other key performance indicators. In our Occupational Health Center operating segment, revenue of $437 million in Q4 2024 was 5.4% higher than the same quarter prior year. Keith outlined our visit decline year-over-year, driven by the continued and expected lower employer services volume, which are lower revenue and lower margin visits and the 5.8% increase in revenue per visit from $137 in Q4 2023 to $145 in Q4 2024. Within the center operating segment, workers' compensation revenue of $289.1 million was 7% higher than prior year. Q4 2024 work comp visits per day increased 1.1% from prior year. Q4 2024 work comp revenue per visit increased 4.4% versus prior year. Workers' compensation revenue represented 66% of our total center operating segment revenue for Q4 2024 versus 65% in Q4 2023. Employer Services revenue in the center operating segment of $137.2 million increased 1.3% from prior year. Employer Services visits per day decreased 4.8% from prior year, in line with expectations and continued trends from recent quarters. The Q4 2024 Employer Services revenue per visit increased 4.8% versus prior year. Onsite revenue of $17.1 million in Q4 increased 7% from the same quarter prior year. We had a solid business development quarter in this operating segment, winning 10 new onsites that will open in the coming months, and we continue to build out an exciting growth pipeline. Other business revenue of $10.9 million increased 8% against same quarter prior year. Our cost of services expense, excluding depreciation and amortization, a major component of which is personnel costs, includes all direct and indirect support costs related to providing services to our customers. Cost of services was $344.9 million or 74.2% of revenue in Q4 2024, down from 75.1% of revenue for the same quarter prior year. General and administrative expense includes corporate overhead such as finance, legal, human resources, marketing, corporate offices and other administrative areas. Our general and administrative expenses were $45.5 million or 9.8% of revenue in Q4 2024 compared to 9.6% of revenue in the same quarter prior year. For the fourth quarter, we had strong cash flow generation with operating activities providing $93.7 million in cash flow and our days sales outstanding, or DSO, was 43 days at December 31, 2024, which was 2 days better than prior year. Our cash flow metrics continue to improve over historical levels. Investing activities used $16.7 million of cash in the fourth quarter, almost entirely from purchases of property and equipment as our teams continue to successfully manage to healthy levels of capital expenditure for maintenance and growth each quarter. Financing activities used $30.6 million of cash for the fourth quarter, and we ended the quarter with a cash balance of $183.3 million. Our net leverage ratio at the end of 2024 was 3.46x, down from approximately 3.9x at the time of our IPO last July. This is a good proof point of our ability to generate strong cash flow and delever. With the strong financial performance, we are pleased to announce that on February 28, 2025, Concentra's Board of Directors declared a quarterly cash dividend of $0.0625 per share. The dividend will be payable on or about April 1, 2025, to stockholders of record as of the close of business on March 18, 2025. We continue to recognize the importance of our dividend as a means to return value to shareholders but our two highest priorities for capital allocation in the near future remain our growth efforts and delevering. Switching to our corporate development efforts. We continued our successful de novo strategy with 3 new occupational health centers in the fourth quarter. We opened our fourth center in the Greater Orlando area, an especially exciting development with the increase in the Florida workers' compensation fee schedule that went into effect on January 1, 2025. We opened a center in DeSoto, Texas, a highly industrial section of the Dallas-Fort Worth area, bringing our total count to 19 centers in greater DFW. And we opened our first center in Knoxville, Tennessee, an exciting growth area for Concentra. Our de novo efforts will continue in 2025 as we have already opened an additional center in the Dallas-Fort Worth area in January, and we have 5 additional leases signed for centers expected to open this year. Our acquisition pipeline remains robust as well as we continue to execute on our core M&A strategy of highly accretive occupational health practices and onsite additions across the U.S. We will talk more about the Nova acquisition here shortly. And now I'll comment on our separation process from Select Medical, highlighted by the completion of Select's spin-off of Concentra in November. We have continued to make solid progress on these efforts as we execute on key leadership hires, building out specific teams in certain functional areas and separating certain support functions and vendor contracts from Select. There is much work remaining, but the takeaway is that we remain on track with the process of operating completely independently from Select Medical by the time our transition services agreement with Select ends in late 2026. With that, I'll turn it back to Keith to provide an update on the Nova transaction.

Thanks, Matt. Our acquisition of Nova Medical Centers for $265 million was officially closed on March 1. To give a brief recap of the business, Nova is a leading provider of occupational health services that is aligned with Concentra's clinical philosophy, service offering, growth strategy and mission. Nova operates 67 occupational health centers across 5 states that are very similar to Concentra. Forty-six centers are in Texas, with the remaining centers located in Georgia, Wisconsin, Tennessee and Indiana. Nova's locations are in attractive areas with a footprint that is complementary to our own. Nova sees over 3,500 patients per day and generated approximately $130 million in annual revenue and $28.3 million of pro forma adjusted EBITDA. The EBITDA figure is comprised of $21.3 million, a trailing 12-month adjusted EBITDA, plus an additional $7 million in projected and annualized synergies that we expect to capture by Q1 2026. For clarity, we do not expect to generate the full $28.3 million over the next 12 months as synergies will be phased in over time, and there will be one-time integration costs associated with capturing those synergies over the remainder of 2025. We expect to continue capturing incremental synergies past year 1 and ultimately achieve an effective multiple on the transaction of less than 7.5x by year 3. We expect the transaction to be immediately accretive in the first year of operation. We have a proven history of successfully executing on acquisitions of all sizes and we are already progressing well on our transition plans to integrate the Nova practices and colleagues into Concentra. We would like to once again extend our gratitude to Nova's leaders and entire team as we are extremely excited to have them join the Concentra family. I'd now like to touch on the funding for the Nova transaction, our broader company financing and our current leverage. The Nova transaction was funded with an approximate $102 million incremental term loan, a $50 million draw on our revolver and the remaining with cash on hand. We repriced our Term Loan B of $950 million, inclusive of the approximate $102 million incremental at SOFR plus 2.00%, down from SOFR plus 2.25% with a 25 basis point step down at net leverage of less than 3.25x. In addition, we upsized our revolver capacity from $400 million to $450 million and repriced at SOFR plus 2.00%, down from SOFR plus 2.50%. We're very happy with these outcomes and the economic benefits in 2025 and beyond. Inclusive of the Nova transaction, our pro forma net leverage ratio is 3.9x, the same level as the time of our IPO. We have a target goal of approximately 3.0x net leverage within the next 18 to 24 months. I'll now turn it back to Matt to add some additional comments as it relates to our previously provided company outlook for 2025.

Okay. Thanks, Keith. Regarding Nova, all I would add is that our team is very excited about the integration efforts and the opportunities that exist. It will take time, but we have a proven playbook and we are looking forward to adding the Nova centers to our network of locations across the country. When the integration is complete, we expect the consistent delivery of care and a consistent approach to doing business with our customers. We've talked a lot about our value proposition and the investments we are making in the occupational health services industry. And now we will be able to drive an even greater impact with more medical centers. And to round out our call in advance of questions, we want to share additional commentary on the 2025 guidance we outlined back in January, including some of the underlying assumptions and the contribution from our core business versus the Nova acquisition. In total, we expect to deliver approximately $2.1 billion in revenue in 2025, an approximate 10.5% increase over 2024. The core business revenue projection includes the impact of all known fee schedule changes, including Florida. It also assumes relative improvement in the recent employer services volume trends over the course of the year, as well as maintaining the recent growth trends of our work comp visit volumes. For adjusted EBITDA, we expect to deliver a total of $410 million to $425 million in 2025, an increase of approximately 11% over 2024 at the midpoint of the range. The projected adjusted EBITDA for the core business includes the estimated separation costs from Select Medical. As it relates to Nova and its contribution in 2025, first, we assume 10 months of Nova within our adjusted EBITDA outlook. Second, as Keith noted, the integration efforts will take time with synergies phasing in over time. Third, there will be a fair amount of transition-related expenses, both at the center level and within G&A. For these reasons, calculating Nova's contribution to Concentra's 2025 adjusted EBITDA is not as simple as taking 10/12 of $28.3 million which is a figure that annualizes synergies that we expect to realize by the end of year 1. We expect Nova's actual contribution to Concentra's 2025 adjusted EBITDA to be $15-plus million. We feel that it is important to clarify this as we want to ensure that we're clearly communicating the strength we see in our core pre-Nova business in 2025. For capital expenditures, our outlook of $80 million to $90 million includes a material amount of one-time spend for the Nova centers. CapEx for the core business is fairly close to our spend in 2024. And finally, for our net leverage ratio, we expect to end the year at approximately 3.5x. In summary, we feel good about our core business outlook in 2025 and layering on Nova will bring many opportunities with time needed to execute, but overall, we are very excited. Back to you, Keith, to close out the call.

Thanks, Matt. It's an exciting time for Concentra, and we believe we are very well positioned to further our success. This concludes our prepared remarks, and we thank everybody for the time today. I would like to turn it back over to the operator to open the call for questions.

Operator provided instructions for participants on how to ask questions. Your first question for today is from Benjamin Rossi with JPMorgan.

So regarding the Nova integration, you mentioned some traits about Nova that make for an easier integration here, including overlap and services offered, their facility sizes and then their favorable margin profile. Just regarding integration, how do you approach larger transactions like Nova? And then what are you baking into your 2025 expectations regarding integration costs here? I think you mentioned CapEx, including some one-time spend.

I'd say for expectations for the larger transactions, we've had several of these over the years and learned how to do them very well. The size and the footprint that we're at these days allows these things to be very accretive to us. Once we get through the process of integrating, deploying our systems and our people. We've got a footprint with Nova that is very overlapping so the infrastructure that will support those centers in those 5 states is already there, our people on the ground today. We're not having to deploy them from other states so it should go fairly well for us based on our history of integration of these type entities. This is probably the second or third largest we've done. U.S. HealthWorks by far the largest. We integrated a similar-sized company called OH&R based in the Northeast back in the early 2000s, and Nova will be about a similar type size of that.

Ben, I would just add, it's Matt. We've been planning for this integration for 6-plus months. We've got a good playbook. We'll do similar to what we do in all the small fold-ins and add-ons. We'll follow that, but just obviously a larger scale here. But we did this in 2018 with U.S. HealthWorks and we're going to basically repeat our process there.

Got it. And then just as a follow-up, just on your deleveraging pathway, following the Nova close, you mentioned the 3.9x pro forma net leverage. You're expecting to take that down about effectively a half turn decrease in '25 and then another half turn in 2026. Can you just kind of walk us through your pathway here and how you're kind of contemplating pure earnings growth and debt pay down with maybe some of your incremental M&A and your de novo activity along the way?

Sure. Yes. I think the story is very similar to the story at the time of the IPO. We were 3.9x levered back in July. We delevered to 3.46x at the end of 2024. Now with this Nova transaction, we're back up at 3.9x, and our guidance is that we'll get to 3.5x by the end of the year. And then we are still targeting roughly 3x net leverage or below within the first 18 to 24 months. So it will be a combination of cash flow generation and some EBITDA growth as well.

And I might add that based on the nature and the seasonality of our business, the slower months are typically fourth quarter and first quarter. So our cash flow coming off those months is a little less than what happens as we get through the summer months, which are busy months; the cash flow in the second half of the year accelerates. So there's a little bit of seasonality in the cash flow. So we would anticipate an acceleration as we get to the summer and start building some of those revenue months.

Your next question is from Ben Hendrix with RBC.

This is Michael Murray on for Ben. With 67 centers, Nova was one of your largest competitors. You've noted before that any of your largest peers could be an acquisition target. Are there any particular regions that you're targeting for your next major acquisition where you would say you're underpenetrated in favorable reimbursement markets?

No, I'd say that we really cast the net far and wide at this point in time, wherever the opportunities are. We're interested in it. So there isn't any real specific region, so to speak, from that perspective.

I would just add: we're looking to continue to grow our footprint with our occupational health centers in pretty much every state across the country. But we're also looking to expand our onsite portfolio as well. So there's opportunities there in the future.

Okay. And just switching gears, just with all the tariff talk, how do you assess the exposure of your employer clients to tariffs? And do you see any meaningful impacts to volumes or employment overall, given these headwinds?

No. At this point, we don't. I think there's a lot of uncertainty around them really for all businesses to see how this plays out. But at this point, based on the nature of our business and what we're doing, I don't really see much of a headwind from it.

Your next question is from Jamie Perse with Goldman Sachs.

Keith, you talked a little bit about just the economic drivers of the business that being tied to employment growth. I'd love to get a better sense of how you got to the comments on guidance for 2025, which I think included improved employer services growth and maybe more sustainable growth trends in the workers' comp business. Is that being underpinned by just a broad view on the economy or a more micro approach based on hiring plans of your customers, new customer wins, new openings, et cetera? We just love a little more color on how you're thinking about the volume trends progressing from here.

Yes. It's a combination of several things. I think as we went through 2024, a lot of uncertainty, I think with the election results that was holding employers back to some extent relative to their growth and their hiring plans. We've seen some better trends, as I mentioned earlier, in 2025 on the Employer Services. I think there's still some uncertainty out there as we read every day, and we continue to watch that and play it out, but we're happy with what we've seen early in 2025 relative to the year-over-year comps that we've seen with some of the employer services visits at this point in time versus what we've seen in the past.

Okay. And then maybe for Matt, can you talk about P&L considerations for 2025? And I guess three pieces I'd like to hear a little bit more about: One is gross margins, just given the strong performance in the fourth quarter. The second is G&A, also given the $8.4 million step-up sequentially that you saw in the fourth quarter. It looks like there has historically been some seasonality there, but anything you can tease out and whether that's a good indicator for G&A in '25, and then lastly, just the timing and how we think about the Select Medical TSAs rolling off versus the stand-alone costs, which I think you've previously sized at about $13 million. So any help on the line items of the P&L for 2025 would be great.

Yes. Sure, Jamie. So I think three parts to your question: cost of services, G&A and then the TSA costs. So in our guidance, we assumed very consistent levels of cost of service and G&A. If you look at our full year '24 over full year '23, both of those were very stable. There was some seasonality in Q4, particularly on the G&A side. And that's pretty typical in Q4 when we're closing out the year. This year, we had some transaction costs in the G&A number. We also accelerated some long-term cash compensation plans as we replace that with public company stock grants. And I think we've talked about that in the past. So that was a little bit of the driver here in Q4. Other than that, we see stable costs for both cost of services and G&A through '25. On your question on the Select TSA, the total estimate by the end of the TSA hasn't changed, and it's in line with the numbers you just quoted. We're going to obviously have less than that in '25, maybe two-thirds of that number or so roughly. And then we'll finish out the TSA costs and the incremental cost will be in '26.

Your next question is from Stephen Baxter with Wells Fargo.

Just to follow up on an earlier question about the Employer Services business. Just trying to understand, when you say improvement, like any kind of context you could give us on how much improvement you're expecting? Like I'm trying to understand whether the exit rate embedded in your guidance for Employer Services is closer to what you view as maybe normalized growth for Employer Services or whether it's still something a little bit more modest than that? And then I have a follow-up or two.

Yes, sure, Steve. It's Matt. Here's what I would say. We don't want to comment too much on the '25 numbers that we haven't reported yet, but we felt it was important to note that we are seeing improving trends in Employer Services as we get a lot of questions about that visit category. The last 3 quarters have been in the minus 4% to minus 5% range. And we're seeing something that's a decent bit better here in January and February. So what's implied in our guidance and our assumptions for '25 is those trends will continue and then they would get to flat year-over-year and then slightly positive growth later in the year. Hopefully, that helps.

Yes, that helps a lot. And then just in terms of the rate side of the business, I know, obviously, you had a large update on the workers' comp business in Florida. But maybe if we think about rate updates that you're seeing sort of on a normalized basis or maybe excluding Florida, I would love to just hear a little bit of color about how those look versus what you've seen in the past couple of years. And then the same type of question for Employer Services, any kind of change in trend on the rate side we should be thinking about?

I would say both of those are slightly elevated over long-term periods of time. Obviously, as inflation continues to be higher than longer periods of time, a lot of our work comp rate increases are tied to that, either CPI or MEI adjustments and our Employer Services pricing follows that same approach. So even if you were to exclude the outsized Florida rate increase, we're still expecting a very good year for both work comp and Employer Services rate in '25.

And I would say that we would anticipate something a little bit stronger than what we've been seeing on the core over the last year or so.

Your next question is from Justin Bowers with Deutsche Bank.

So a lot of milestones and activity over the last 6 months. Can you just refresh us on the long-term growth algorithm of the business in terms of like volume, price, same-store for those new to the story?

Sure. Justin, we included a page in our investor deck too, if anyone wants to reference. But the story is very consistent to what we've talked about historically from a revenue growth standpoint: mid- to high single-digit growth broken down by low single-digit visit growth at our centers, plus or minus 3% rate growth across both main visit categories and then we'll continue to do M&A. In that number, the mid- to high single-digit growth rate is just our core de novo and M&A strategies; it does not include anything more sizable. So those are really the three components that drive our long-term revenue outlook.

Okay. And then in terms of development activity: so in the prepared remarks, you mentioned one HawkHealth center that's come online in January and then 5 leases and then also 10 onsite health centers coming online. Is there additional development activity in the guide excluding the Nova deal? Or is that sort of a jump-off point for the year?

No. Included in the guide is only the one center we launched, the 5 centers we have signed leases that we plan to open this year and then just normal growth for our onsite business. There's no additional M&A in that guide.

Okay. And then last, just a quick follow-up. In terms of payer mix, how much government pay exposure do you have — Medicare, Medicaid, et cetera?

It's roughly 1%, less than 1% from Medicare and Medicaid perspective. Next to nothing. We just have some sprinklings of it out there that we've picked up through transactions over the years, but we don't do any active marketing or solicitation of those visits.

Your next question for today is from Joanna Gajuk with Bank of America.

So a couple of follow-ups. First, on the Florida rate up, I don't recall you actually helping us quantify. So how much, I guess, is that reflected from these rates in Florida in the guidance?

Joanna, yes, Florida, I think as we've mentioned on previous calls, that went into place 1/1/25. We're already seeing that early this year. Obviously, we are not going to quantify the rate increases on a state-by-state basis. But all of that and all other states are included in our total guidance for '25.

Right. Is there any other states apart from Florida that have not updated the fee schedule for several years? Or was that the only one really?

That was the only one that we would anticipate this year. The majority of all the others have been on somewhat of a regular basis. And as we've mentioned in the past, the majority of our states are on a regular cadence of either automatic fee escalators that go into play every year, typically January 1, or they'll review it and make some adjustments to it periodically. But Florida was probably the largest at this point in time. There are several others we're working on that we would be hopeful in the future we might get something, but I wouldn't anticipate it being on the magnitude of Florida.

Right. And the last one on that topic related: with that fee schedule update bringing rates in Florida to a point where the margins are kind of comparable to other markets, does that mean that you have some active plans to add more locations in that state?

Yes, absolutely. Some of the de novo projects that Matt just mentioned earlier had been in Florida, a couple in Orlando, Miami, Fort Myers over the last several months. Definitely evaluating M&A activity in Florida. So it's made it a much more attractive state for us to deploy capital in at this point in time.

We have reached the end of the question-and-answer session, and I will now turn the call over to Keith for closing remarks.

Appreciate everybody joining us today, and that concludes our remarks. Thank you.

This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.